Loading data...

PEER COMPANIES

NEW DELHI: Nifty50 reclaimed the 10,700 mark on Monday from a low of 10,004 hit on October 26, showing signs of a sudden change in the market momentum on a steep drop in crude oil prices and a sharp recovery in the rupee.

Yet, many FPI-favourite stocks failed to pick up momentum during the period, as earnings worries played spoilsport.

Shankara Building Products, where foreign investors own one-fifth of total shares, is down 21.71 per cent since October 26, in addition to a 32 per cent drop that took place during the broader market selloff seen between August 28 and October 26, data compiled from database AceEquity suggests.

The company reported a 60 per cent drop in September quarter profit. There are concerns that margins of this company may remain under pressure in the near term, as it looks to introduce new products with better pricing.

Info Edge (India), owned 32.9 per cent by FPIs, reported a marginal drop in profit for the quarter at Rs 78 crore, but its Ebitda margin shrank 830 basis points YoY to 31.1 per cent on a one-time CSR expense.

The company reported increased ad spends and higher product development cost for the quarter. Brokerage Motilal Oswal Securities does not see any upside on this counter. The stock managed to hold ground during the August-October selloff but has declined 14 per cent since October 26.

Data showed FPIs have infused Rs 3,347.79 crore into domestic equities so far this month, compared with a Rs 28,921 crore outflow in October and Rs 10,825 crore selloff in September.

In the case of Page Industries, the stock is down 13 per cent, in addition to an 18 per cent drop during the August-October selloff. The company has reported an unexpected drop in top line growth at 10.4 per cent, thanks to low volumes, which the management said was one off due to a delayed festive season and continued dealer destocking due to GST-related issues. Emkay Global has cut FY19-21 earnings estimates for this company by 6-9 per cent.

Cipla’s 11 per cent drop in September quarter profit was lower than analyst expectations. “The management envisages growth pressure on sales and profitability in H2FY19 owing to higher raw material prices (supply constraint from China), capacity issues and a decline in the tender business. Considering weak quarterly performance and imminent challenges, we downgrade our recommendation on the stock to ‘hold’ from ‘buy’,” Reliance Securities said.

Ashok Leyland, 22.9 per cent owned by foreign investors, had a different reason to fall. The stock has slipped 5 per cent since October 26 after CEO and MD Vinod Dasari announced his decision to step down, citing personal reasons. Second quarter earnings, meanwhile, were more or less in line with market expectations.

FPIs hold 45.4 per cent in rating agency Care Ratings. The scrip is down 6 per cent since October 27 against a 7 per cent rise in the Nifty.

“Pricing pressure in the BLR (bank loan rating) segment will impact overall rating revenues. Additionally, lower other income and Esop cost will impact earnings. In the backdrop of above challenges, we have lowered our FY19/ FY20 revenue and profit estimates,” Centrum Broking said in a note.

The Great Eastern Shipping Company, Mphasis and NIIT Technologies are three other FPI-heavy stocks, which have failed to join the Nifty50 rally from 10,000 to 10,700 level despite a halt in foreign outflows.